Topic 1: Pankaj Ghemawat on globalization
Pankaj Ghemawat has a slightly different view on globalization. He argued that the world is not that flat that it appears and there exists various differences between the countries. In this era of globalization, the focus of organizations is to expand in other countries. Organizations would often ignore the social and cultural challenges as they think that globalization has make world a flat place. Conscious capitalism is doing business in a moral and ethical manner. It allows you to achieve your goals without feeling like you’re compromising your dignity or soul. Conscious capitalism is a leader convictions transmitted to the rest of the organization. It is his consciousness that is transmitted to the rest of the organization as a vision to lead and conduct business (Ghemawat, 2012). In the globalized environment, When leaders are able to bring light to individuals that contribute to the success of an organization it is important to acknowledge their contributions. Some are recognized by receiving a raise or a promotion. The learning from the view of Pankaj Ghemawat on globalization is that organizations should be careful when they wish to expand in different parts of the world. There are number of cultural, social and other factors that organizations should consider while expanding in new geographies (Ghemawat, 2012).
The learning from this material could be applied to the organizations that want to expand in new markets. For example, it could be applied to Walmart as it plans to expand in Indian market. The conscious of the leader is transmitted to the organization through a vision in order to create the mission statement, the parameters of how the business will function. It is important that the leaders of Walmart should realize the difference between India and United States of America (Morck & Yeung, 2012). There are various cultural differences between these two countries and the strategies or strategic management approach that works best in USA may not work in India. It is good that Walmart wants to enter the Indian market and globalization has provided a good push to it. However, Walmart should not leave everything on the forces of globalization. In Indian market, to get the consumer mid share, Walmart may be required to invest some money on CSR (Corporate Social Responsibility). However, Walmart is a typical for-profit organization with the prime focus on capitalism. The difference between CC (Conscious Capitalism) and CSR is that one is actually striving to be good (in a moral sense) while the other is striving to be seen as good. There may be some overlap as being good produces good works, but good works are not always produced from a philosophy of being good and are sometimes merely PR gimmicks or fulfillment of expectations (Morck & Yeung, 2012). It can be concluded that Walmart must have a deep understanding of Indian market before it starts it operations in the Indian market.
Topic 2: Stages of going global
The lecture specifies that there are five stages of going global. These stages are market entry, product specialization, value chain disaggregation, value chain reengineering and creation of new markets. Generally, the organizations would have the above five stages as they expand in new market. However, it is also important to mention that the organizations may not have these stages in sequential manner. The stage of globalization can also vary from industry to industry. Some industries may have a rigid sequence of the above five stages and some industries would not have the sequence. Therefore, it is important that the organizations operating in different industries should have a good understanding of the industry factors. Generally the first step in an expansion is market entry. There are various ways to enter a new market (Paul & Gupta, 2014). The large companies like Google, Microsoft, and Amazon etc. prefer direct mode of entry, as they do not want to be dependent. At the same time, these companies have deep pockets to make direct investment in the foreign market. Another widely used mode of entry is merger, acquisition or joint venture. The joint venture helps organizations to minimize the risks in business operations in the new country.
The learning from five stages of going global could be applied to Amazon as it is trying to increase its hold in Indian market. The company has already entered the Indian market through a direct market entry approach. Amazon has already focus on product specialization. The company is focused to provide excellent services to its customers. It wants that its customers should act as its partners. It is suggested that Amazon should have such a value proposition in the Indian market that customers cannot refuse. It is important that the board of directors should take local Indian employees into consideration while making any decision for value chain disaggregation and value chain reengineering (Oh & Contractor, 2014). The board of executives makes decisions that align with the company values, and doing the right thing happens to be the number one value. Decisions from senior managers, all the way down to team leaders in the field are driven by this value. Amazon should also keep in mind that the five stages of expansion may not be in sequential order. There can be dynamic placement of these stages. The important thing is that the management of Amazon should have a long-term plan in place for Indian market. The last step in the value chain is ‘new market creation’. It can happen when Amazon considers India as a strategically important market where it can stay for long term. In fact, Amazon can also learn from its expansion case studies in different markets like Australia, and other European countries.
References
Ghemawat P. 2012. Not That Flat: Pankaj Ghemawat Challenges Globalization’s Adherents. Public Policy. Retrieved from: https://knowledge.wharton.upenn.edu/article/not-that-flat-pankaj-ghemawat-challenges-globalizations-adherents/
Morck, R. and Yeung, B., 2012. The New Asia: Corporate Challenges and Leadership Development. In Leadership Development in a Global World (pp. 214-226). Palgrave Macmillan UK.
Oh, C.H. and Contractor, F., 2014. A regional perspective on multinational expansion strategies: Reconsidering the three?stage paradigm. British Journal of Management, 25(S1), pp.S42-S59.
Paul, J. and Gupta, P., 2014. Process and intensity of internationalization of IT firms–Evidence from India. International Business Review, 23(3), pp.594-603.
